FCC Auction 110 rakes in $22.5 billion in gross proceeds for 3.45 GHz Service


The results of the FCC’s 3.45 GHz auction were announced today. On January 4, 2022, bidding in Auction 110—the auction of new flexible-use licenses in the 3.45–3.55 GHz band—concluded following the close of bidding in the assignment phase.1 Auction 110 raised a total of $22,418,284,236 in net bids and $22,513,601,811 in gross bids, with 23 bidders winning a total of 4,041 licenses.   With $22.5 billion in gross proceeds, Auction 110 was the third highest grossing auction in the FCC’s history.

The 3.45 GHz action makes available 100 megahertz of mid-band spectrum for commercial use across the contiguous United States. Licensees can use it for fixed or mobile uses.

Here are the big winners:

AT&T: $9.1B
Dish: $7.3B
T-Mobile: $2.9B

AT&T won 1,624 licenses in the 3.45 GHz auction, and Dish, bidding under the name Weminuche LLC, won 1,232 licenses. US Cellular acquired 380 licenses, followed by Cherry Wireless LCC with 319. T-Mobile acquired 199 licenses.  Meanwhile,  Verizon bid =ZERO.

The remainder went to a relatively familiar list of private equity investors, including Grain Capital, Columbia Capital, and Charlie Townsend’s Bluewater Wireless.  The results were as expected- Dish spent more than expected, and AT&T a bit less, but in rank order and in magnitude, the numbers were relatively close to expectations.

Credit:  Getty Images

The “mid-band spectrum” that was auctioned off is considered crucial for mobile operators’ deployment of next generation of wireless service such as 5G, which promises to deliver much faster wireless service and a more responsive network. Mid-band spectrum provides more-balanced coverage and capacity due to its ability to cover a several-mile radius with 5G, despite needing more cell sites than lower-tiered spectrum bands. Its ability to connect more devices and offer real-time feedback is expected to spark a sea change in how we live and work, ushering in new advances like self-driving cars and advanced augmented reality experiences.

“Today’s 3.45 GHz auction results demonstrate that the Commission’s pivot to mid-band spectrum for 5G was the right move,” said FCC Chairwoman Jessica Rosenworcel.  “I am pleased to see that this auction also is creating opportunities for a wider variety of competitors, including small businesses and rural service providers. This is a direct result of the Commission’s efforts to structure this auction with diversity and competition front of mind.”

Craig Moffett wrote in a note to clients shortly after the auction results were announced by the FCC:

“After the almost $100B spent on the C-Band auction [1.], these numbers might sound almost quaint.  Still, AT&T’s $9B translates to nearly a quarter turn of additional leverage.  And for Dish Network, it is roughly two years of EBITDA, or two full turns.   As always, spending money on spectrum is only the beginning.  Now starts the spending on putting the new spectrum to work.  The carriers did not pay up for this spectrum to allow it to languish in a fallow state, and the Towers will be natural beneficiaries of the deployment process over the coming years.  Carrier plans for the C-Band suggest that spectrum will ultimately be deployed in a fairly broad-based manner, rather than just in more densely populated areas of the country, and a similar result seems likely for this spectrum, given its broadly similar propagation attributes.”

Note 1.  The C-band auction broke records with its $81.2 billion in gross proceeds.

Analysts at New Street Research thought T-Mobile was going to win more spectrum than it did. They were predicting T-Mobile to spend in the range of $6.6 billion and Dish to spend about $5 billion.  The FCC is planning for even more auctions in the future.

References:

https://www.fcc.gov/document/fcc-announces-winning-bidders-345-ghz-service-auction

https://www.fcc.gov/auction/110

https://www.cnet.com/tech/mobile/at-t-and-dish-big-winners-in-latest-5g-auction/

https://www.fiercewireless.com/wireless/att-dish-top-list-fccs-345-ghz-auction-winners

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